Consumers, Small ATM Networks Fight Against ATM Fees

Consumers are saying they are fed-up with not just Bank of America's debit card fees but other banks' ATM fees as well. Three anti-trust lawsuits are alleging Visa and MasterCard, the largest card networks, are unfairly "fixing" prices against both consumers and independent ATM providers.

In the most recent suit filed Oct. 18, one man from New Jersey, Justin Genese, is proposing a class action against the top providers of automated teller machine (ATM) services for "orchestrating, implementing, and facilitating a conspiracy to fix the prices for ATM Access fees."

An ATM user who obtains money from a machine not belonging to their bank is notified on the ATM's screen about a $2.50 fee or more surcharge.

Genese's suit is against Visa, MasterCard, Bank of America, J.P. Morgan Chase, Wells Fargo and two other financial companies, alleging that customers have "been forced to pay artificially inflated, supra-competitive ATM Access Fees" to the bank defendants and "bank co-conspirators."

All three suits, filed in the District of Columbia, say the largest ATM providers and other financial institutions are unfairly restricting market movement by preventing ATMs from charging different fees to consumers based on their type of debit card.

A similar suit filed by 14 independent ATM providers on Oct. 12 alleges that Visa and Mastercard are restricting competition by forcing them to charge all their users the same fee, regardless of their type of debit card. The plaintiffs include ATM operators not affiliated with banks, including the National ATM Council, a trade association, and ATMs of the South.

The suit alleges that Visa, MasterCard and their member banks "have misused this power to fix the access fee for any transaction at a given ATM or terminal to be no less than the amount charged at that ATM or terminal for a Visa or MasterCard transaction...without regard to any cost saving to the ATM operator of obtaining service from one of the alternative PIN-based networks."

"The ATM restraints, therefore, effectuate horizontal price fixing that is unlawful per se," the suit alleges.

"If there was a truly competitive market, the levels of the fees would be lower," Jonathan Rubin, attorney for the ATM providers said. "They're in the business of selling convenience."

About half of the 400,000 ATMs in the country are operated by providers not affiliated with banks, according to Rubin. He said his clients earn revenue by charging a surcharge to customers and a back-end switch fee.

"These rules were put in place to protect consumers from ATM operators seeking to impose discriminatory surcharges on our cardholders," he said. "We believe these important consumer protections must be preserved and we will vigorously defend against the claims brought against us."

Lisa Westermann, a Wells Fargo spokeswoman, said, "We believe the allegations of the complaint are without merit and plan to vigorously defend the case."

Spokesmen for Visa and Bank of America declined to comment. JP Morgan Chase did not respond to a request for comment.